Billionaire Adani to buy Holcim’s India cement biz for $10.5bn | Business and Economy News

Swiss building materials company Holcim Ltd. has agreed to sell its India operations to local billionaire Gautam Adani, now Asia’s richest man, another step in CEO Jan Jenisch’s strategy of pivoting away from traditional cement.

The company will sell its 63% stake in Ambuja Cements Ltd. listed in Mumbai for Adani Group, it said in a statement on Sunday. Adani said it plans to spend about $10.5 billion on share purchases and considers an open offer to Ambuja and related entities.

As part of the deal, Adani will inherit Ambuja’s controlling stake in another publicly traded cement producer, ACC Ltd., and purchase Holcim’s 4.5% direct stake in the unit. this. Holcim expects to receive 6.4 billion Swiss francs ($6.4 billion) in cash proceeds from the sale, according to the statement.

“We have quite a few lists of businesses that we want to acquire, so I think we can put this money here very well,” Jenisch said in an interview on Sunday. . “We are doing more than 10 transactions at the moment.”

Jenisch, who joined Holcim in 2017 from Sika AG, has sold non-core cement businesses and acquired new construction companies to benefit from the rising demand for energy efficient buildings. quantity. As part of his strategy to expand his so-called products and solutions division, he spent about $5 billion on acquisitions including Malarkey Roofing Products in December and Firestone Building Products in December. early 2021.

55-year-old German, cleaning up the company after the mess big fusion of Holcim and France’s Lafarge SA in 2015. Jenisch divested a Brazilian unit for $1 billion in September and Asian businesses like Holcim Indonesia in 2019.

Holcim’s sale of its Indian business – subject to local regulatory approvals – is expected to close in the second half of 2022, thanks to the fact that Adani has no major overlap. The company started looking at sales of new properties last year after acquiring the roofing, Jenisch said, and concluded negotiations with a number of potential Indian buyers in about three months.

‘Location of Strength’

“It’s important to us that we have a strong balance sheet,” he said in the interview, adding that prompt completion, consistent and consistent pricing were key. to select the winning contractor. “It is always wise to stay fit and have the opportunity to make deals and not have to think about, oh, how am I going to raise this money.”

For Adani, the deal gives Asia’s richest man a foothold in the subcontinent’s fragmented cement sector. His team beat out other local companies including JSW Group, according to people familiar with the matter. Bloomberg News previous report that the Adani Group is in advanced negotiations with Holcim.

Adani Group is offering Rs 385 per share for Ambuja Cements, 7.2% higher than Friday’s closing price, according to Sunday’s statement. It will pay 2,300 rupees per share to ACC.

Shares of Ambuja Cements were up as much as 3.5% in early Monday trading in Mumbai, while ACC was up as much as 7%.

The Group has moved beyond its core business of port operations, power plants, coal mines and renewable energy and into areas such as data centers, airports, digital services, and retail. and media.

Asia’s richest man is said to be a scout because of India’s media fortune

A first-generation entrepreneur with a net worth of about $100 billion, according to the Bloomberg Billionaires Index, Adani is looking to transform his company into a multi-field growth company like Reliance Company. Industries Ltd. by Mukesh Ambani. overcome Ambani was the richest person in Asia – and India – earlier this year.

Read more: Adani joins Musk, Bezos in exclusive $100 Billion Club

Adani’s motivation

The deal with Ambuja will turn Adani Group into a major player in the cement sector. Established in 1983, Ambuja has a cement capacity of 31 million tons, and has six integrated manufacturing plants and eight cement grinding units in India, website Shows.

“Our move into the cement business is another validation of our belief in the country’s growth story,” Adani, the chairman of his eponymous group, said in Sunday’s statement. .

The flagship company of the Adani Group is Adani Enterprises Ltd. has two cement subsidiaries. Adani Cementation Ltd. is planning to build an integrated facility in the state of Gujarat, according to a November compliance report establish Adani Cement Industries Ltd. in June 2021.

Barclays Plc, Deutsche Bank AG and Standard Chartered Plc worked with Adani on the acquisition. Holcim led the transaction with an in-house deal group backed by BNP Paribas SA, JPMorgan Chase & Co. and Perella Weinberg Partners.

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